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Third Circuit Breaks Away From Sister Circuits in FDCPA Statute of Limitations Ruling

The Court of Appeals for the Third Circuit has broken away from two other Appeals Courts in ruling that the statute of limitations under the Fair Debt Collection Practices Act starts when the violation occurs, not when it is discovered, according to a ruling it issued following an en banc hearing. The Court of Appeals upheld a District Court’s ruling in this case.

Previously, the Fourth and Ninth Circuits had ruled that the statute of limitations started when the violation is discovered.

A copy of the Third Circuit’s ruling in Kevin Rotkiskie v. Klemm et al can be accessed by clicking here.


Rotkiskie had a balance on his credit card that was placed with the defendant for collections. The defendant attempted to sue the plaintiff in 2008 but was unable to locate him. The defendant tried again in 2009, and unbeknownst to the plaintiff, someone accepted service of the lawsuit on his behalf. The defendant was able to obtain a default judgment, which was discovered when the plaintiff applied for a mortgage in 2014.

In June 2015, the plaintiff filed suit against the defendant, alleging a violation of the FDCPA. The defendant moved to have the case dismissed because the statute of limitations had expired and the District Court judge granted the motion. That decision was appealed to the Third Circuit, which issued its en banc ruling yesterday.


The legal argument at play here is known whether Congress intended to use something known as the discovery rule, which delays the beginning of a limitations period until the plaintiff knew of or should have known of his injury, or the occurrence rule, which is when the actual violation happened. The language in the FDCPA indicates that Congress intended to use the occurrence rule, which is why the language in the statute says “within one year from the date on which the violation occurs,” wrote Judge Thomas Hardiman in yesterday’s ruling.

When a bill states that payment is timely if it is “received at the bank by 5:00,” it goes without saying that a check arriving at 6:00 is late even if it was postmarked a week earlier.

The Appeals Court also rejected the plaintiff’s argument that failing to apply the discovery rule would “thwart” the principal purpose of the FDCPA, which is to combat abusive debt collection tactics.

First, to the extent Rotkiske contends that the collection practices the FDCPA proscribes are inherently fraudulent, deceptive, or self-concealing, the statute belies his argument. Debtors are often vexed by overzealous or unscrupulous debt collectors precisely because of repetitive contacts by phone or mail. As the language of the FDCPA makes clear, many violations will be apparent to consumers the moment they occur. … The Act’s statute of limitations applies to all of its provisions, so we decline Rotkiske’s invitation to interpret the Act as if it contemplated only concealed or fraudulent conduct.

The plaintiff also tried to get the Third Circuit to look at other rulings from the Fourth (Lembach v. Bierman) and Ninth (Mangum v. Action Collection Service, Inc.) Circuits, both of which implied the discovery rule with respect to the FDCPA’s statute of limitations.

Both courts, Judge Hardiman wrote, “failed to engage the statutory text” of the FDCPA, by looking at the “violation occurs” language of the statute.

We conclude by emphasizing that our holding today does nothing to undermine the doctrine of equitable tolling. Indeed, we have already recognized the availability of equitable tolling for civil suits alleging an FDCPA violation. See Glover v. F.D.I.C., (3d Cir. 2012) (considering and rejecting an equitable tolling argument where no extraordinary barrier existed to plaintiff’s suit). We do not reach the question in this case only because Rotkiske failed to raise it on appeal. Accordingly, our opinion should not be read to foreclose the possibility that equitable tolling might apply to FDCPA violations that involve fraudulent, misleading, or self- concealing conduct. See, e.g., Bailey v. Glover, 88 U.S. (1874) (“[W]here the party injured by the fraud remains in ignorance of it without any fault or want of diligence or care on his part, the bar . . . does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it . . . .”).




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